Argentina Economic Outlook
August 7, 2018Recently released data shows that the financial storm that hit the country in the second quarter, coupled with a prolonged drought, took a heavy toll on the economy. Economic activity contracted sharply in May, after a small drop in April, dragged down by plunging agricultural output. This also affected the labor market, which saw the number of employees fall in April–May, and weighed heavily on consumer confidence in Q2. In an effort to reduce the fiscal deficit—one of the goals of the stand-by arrangement reached with the IMF in June—the government announced it will gradually raise public transport tariffs in the Buenos Aires metropolitan area. Moreover, the federal housing plan will be discontinued, and capital spending will be cut.
Argentina Economic GrowthDespite a healthy first quarter, the pace of growth is expected to slow sharply this year. The loss of agricultural output following the severe drought; extremely high interest rates and currency volatility, which will weigh on investment decisions; and consumer spending constrained by low confidence and rapid inflation are seen driving this deceleration. Panelists participating in the LatinFocus Consensus Forecast foresee the economy expanding 0.4% in 2018, down 0.5 percentage points from last month’s forecast. For 2019, growth is expected to reach 1.9%.
Argentina Economy Data
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|Bond Yield||6.69||0.15 %||Dec 17|
|Exchange Rate||29.75||0.45 %||Aug 15|
|Stock Market||27,008||2.26 %||Aug 15|
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Argentina Economic News
August 16, 2018
According to the National Statistics Institute (INDEC), national consumer prices rose 3.1% over the previous month in July, coming in below June’s 3.7% month-on-month increase.
August 8, 2018
At its latest meeting held on 7 August, the Central Bank of Argentina (Banco Central de la República Argentina, BCRA) decided to change its key policy instrument from the seven-day repo reference rate (seven-day LEBAC rate) to the seven-day liquidity bills rate (seven-day LELIQ rate).
August 3, 2018
In June, industrial production plunged 8.1% over the same month last year, according to data released by the National Statistical Institute (INDEC) on 2 August.
July 26, 2018
Exports fell 1.4% in year-on-year terms in June, an improvement from May’s revised 6.5% year-on-year contraction (previously reported: -6.0% year-on-year).
July 24, 2018
The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) contracted 5.8% in annual terms in May, which was below the revised 0.6% fall recorded in April (previously reported: -0.9% year-on-year) and marked the worst performance in nearly nine years. The contraction came on the back of a significant decline in agriculture, livestock, hunting and forestry activity, which plunged 35.2% in May (April: -30.3% yoy; previously reported: -30.8% yoy).